Why S&P 500 is cruising through policy upheaval

IF YOU ARE wondering why the S&P 500 Index has held up so well in the past two months, look no further than the technology and communications sectors, which collectively account for nearly half of the index by weighting.

- Jonathan Levin Bloomberg

For all the wild and headline-grabbing swings in trade policy since early April, analysts have continued to project more than 14% earnings growth in those combined sectors this year — an outlook that really hasn't budged. Wall Street isn't ignoring the potential risks from tariffs and a consumer slowdown, analysts just think that America's innovation superstars will partially offset any damage.

And reasonably so. Artificial intelligence posterchild Nvidia said on Wednesday that it had $44.1 billion in revenue in the latest quarter, up an extraordinary 69% from a year earlier. Microsoft, the index's biggest company by weighting, posted a 20% increase in cloud revenue last quarter, showing why its software-heavy model leaves it relatively insulated from tariffs. And Netflix, which successfully hiked subscription prices recently, said revenue jumped 12.5%, reaffirming the resilience of its business model.